Before You Buy

Friday May 20, 2016

Summer is here and just like the weather outside, it is typically a "hot" time to buy or sell your home. Buying a new home can be so exciting. And exhausting. And fun. And emotional. Here are five things new home buyers can do to make the process easier.

Make a realistic decision on your budget. Don’t be tempted to check out houses that are over your price range. Take a look at how much you’re paying now for rent and utilities or, if you own, the monthly mortgage payment, taxes, insurance, utilities and other costs. Then determine how much more you can spend. This mortgage calculator can help you determine how much you can afford.

Choose your real estate agent carefully. Buying a house is not a DIY project. A real estate agent will represent you and assure all contracts are accurate. A good agent will save you money in the long run. Ask friends for referrals, and when you find an agent, ask for references. Be sure the agent has good experience with houses in your price range and in the neighborhoods you want to consider.

Get pre-qualified for a mortgage amount before you start looking. A mortgage advisor will review financial documents, including your past two tax returns, and your credit score to determine what you qualify for. You can certainly purchase a home that is less than the pre-qualified amount, but this way you’ll have a good idea of your price range before you start hunting.

Hire a professional inspector to inspect the prospective house. When you find the perfect house you should thoroughly inspect it yourself, but you also need to hire a professional inspector to look at the entire property and explore any questions or concerns you have. The buyer typically pays this cost (usually in the $300-$500 range).

Negotiate the rate and terms of your mortgage and shop your homeowners insurance. Unless you plan to live in the house just a short time, consider a fixed-rate mortgage for 15, 20 or 30 years. And be sure you understand the difference between fixed-rate mortgages and adjustable rate mortgages. Your mortgage advisor can provide information that will help you decide which is best for you based on your specific circumstances. To save money on your homeowners insurance, check out a number of insurers. Narrow your choices and get quotes from there. But don’t make your decision solely on price—you should consider products and service too.